GMP Capital Trust is expected to announced the launch of a new hedge fund this year, according to Canadian newspaper Globe and Mail. The $50-million hedge fund is to be co-headed by star trader Michael Wekerle.
The firm will put up $20-million, employees will add their own money and outside investors will be invited to join, according to the paper. GMP is following a blueprint drawn up by houses such as Goldman Sachs Group Inc., which gleans more than half its revenue from smart investments with its own capital. All the major Canadian dealers also have proprietary trading funds that use hedge fund strategies.
If the fund can build a successful track record, sources at GMP say they anticipate it will attract support from wealthy individuals and outside institutions such as pension funds, which have embraced alternative asset managers in recent years.
The new hedge fund is expected to deploy four investment strategies. There will be a traditional equity trading approach that includes taking long and short positions, the fund will also do credit trading, which would include buying distressed debt, plus what's known as program or algorithmic trading and options-based volatility investing.
Successful hedge funds created by domestic dealers include three-year old Flatiron Capital Management Partners, a $350-million (Canadian) fund backed by National Bank Financial and staffed by its former employees.
No comments:
Post a Comment